Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

One of the major challenges facing the agriculture sector is its age profile. Central Statistics Office, CSO, data indicates that the average age of farmers rose from 50 to 54 between 2000 and 2010. More than half were aged 55 years or older, whereas more than a quarter were aged over 65 years. The number of farmers under 35 years more than halved to less than 6% of farmers.

There are a number of taxation measures available to help minimise the taxation implications of intergenerational farm transfer. I have ongoing and detailed consultation with the Minister for Finance to ensure the continuing effectiveness these measures, which include stamp duty exemption on transfers of land to young trained farmers, which was extended in budget 2012 for a further three year period until 31 December 2015; agricultural relief from capital acquisitions tax, whereby the market value of agricultural property is reduced by 90%; and retirement relief from capital gains tax, CGT, where an individual over 55 yearsdisposes of some or all of his or her agricultural assets, including land, once certain criteria are met. Whereas definitive statistics on the number of farms that have been transferred to younger farmers are not available, a good indication of these is the number of farmers claiming retirement relief from CGT. For the two most recent years for which data are available, there were approximately 740 claimants in 2011, with provisional data for 2012 indicating around 610 claimants.

We have an ongoing review of all agricultural taxation measures with the Department of Finance, and we are trying to ensure we maintain the value of supports to the agricultural sector into the future while recalibrating it for the challenges we currently face. Over the past 30 years, with every budget there have been new decisions affecting agriculture which add to previous issues. We will examine a more strategic approach to agricultural taxation so as to deal with matters like generational change, challenges from climate change, income supports, land transfers and other key issues to be addressed.

Additional information not given on the floor of the House

I have ongoing contact with the Minister for Finance to ensure that tax policy continues to reflect the Government’s commitment to agriculture and, in particular, to the objectives of smart, green, growth outlined in the Food Harvest 2020 strategy. A review of tax measures in the farming sector, a joint initiative between my Department and the Department of Finance, was announced in budget 2014 and is now under way. Among the key policy areas identified for examination in the course of the review are encouraging and attracting young farmers and new entrants to farming and succession and earlier lifetime transfers within families.

The purpose of the review is to analyse the benefits of the various tax measures to the agriculture sector and the wider economy versus the costs, i.e. value for money to the economy. The overall objective is not to change the level of support to the sector through the tax system but rather to maximise the benefits of the existing level of support and to ensure tax policy aligns with the objectives set out in Food Harvest 2020. There has been a good response to the request for written submissions and the next phase of the public consultation will involve meetings with key stakeholders. The recommendations of the review will be considered in the context of budget 2015 and will influence tax policy in the agriculture sector for a number of years to come.

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